Bitcoin has been around 13 years, but smart contracts only 7, and DeFi only around 4 years. Institutional-quality MPC wallets have been around less than two years.
Smart contracts are called triggers and automated workflows in other contexts. They have been around for decades. The crypto-world innovation, if you can call it that, is removing the possibility of undoing or reversing the action, and the misguided idea that programmers can write code that works reliably all the time, otherwise known as hubris.
Yes, Vitalik has proposed calling smart contracts “persistent scripts” instead. It’s the trustless execution on-chain that makes them unique to other programs.
Whether or not they existed in other forms doesn’t change the argument that they are unique to crypto as of roughly 7 years ago and have made a huge impact on the ecosystem.
A huge impact in terms of discovering bugs and getting hacked, with no recourse. Everything is “unique to crypto” because the “community” reinvents the wheel and gives it a cool-sounding name. Everything has a huge impact because the ecosystem is both volatile and fragile.
How are “persistent scripts” different from any other code? Transient scripts aren’t very useful.
“Trustless” is a meaningless buzzword. Anyone using the script trusts the developer and the people who control the blockchain it runs on. I think the history of Ethereum shows how that works out.
> The Ethereum network forked after an incident in July 2016. At that time, attackers exploited flaws in the smart contract code of a prominent application running on Ethereum called The DAO. In response to community concerns, the Ethereum Foundation implemented a hard fork to roll back all DAO-related transactions and allow the DAO's original contributors to reclaim their funds.
I trust my bank and its persistent database triggers and scripts far more than I trust the clown car of amateurs running Etehereum. Pretending that something is innovative doesn’t make it so.
Serious software bugs and hacks are not exclusive to smart contracts. Just look at the Equifax hack or the 737 Max tragedies. If you only look at the worst outcomes of a system of course you’re going to assume it’s all worthless, but that’s not a fair representation of the reality.
Smart contracts allow anyone to deploy an application to a global computer that will host the software indefinitely for all to access, with essentially zero downtime for five years running. That global computer will also take care of 100% of your logging and accounting for you and replicate it on millions of nodes around the world within seconds.
Banking APIs are a total integration nightmare, while smart contracts can easily integrate with one another through standard open source interfaces, allowing for contracts to build on top of one another’s code and liquidity in unique ways and in a fully transactional nature due to the shared execution layer.
You also don’t have to trust the developer of a contract to do what they claim, because the protocol’s code can be publicly audited and transactions can be simulated.
All I’m trying to say is yes, smart contracts are innovative - these are just some of the ways that they have improved on traditional computer programs.
Of course, you do have to trust a network. The 2016 hard fork was problematic, but Ethereum has come a long way in 6 years and is magnitudes larger in scale, with no similar breaches of consensus since. It has proven itself to be extremely trustworthy.
I would trust Ethereum, wherein every single fraction of a cent can be publicly reconciled and accounted for since inception, over Wells Fargo, which is involved in ongoing class action lawsuits over fraudulently opening checking accounts and stealthily reordering transactions to increase overdraft fees.
The so-called “global computer” runs on the internet, and the nodes are just servers. Blockchains built on top of the available substrate cannot be somehow more capable, stable, reliable, or persistent than what they run on.
Software bugs are a fact of life. But if my bank makes an error I have recourse. If my debit card is stolen I’m protected. Wells Fargo may be greedy and corrupt, but it’s not a Ponzi scheme, and they can’t rugpull and disappear with depositor accounts.
DeFi by other names dates from prehistory.